Thoughts from Las Vegas on Lifting the Casino Ban in Japan

Enjoying Not Only Casinos but Gourmet Food and Shows

I closed out 2013 and welcomed 2014 in Las Vegas, Nevada―the fourth time in five years that I have welcomed the New Year there. I am invited each year by a Taiwanese friend of mine who has lived in Las Vegas for more than 30 years. He has a PhD from an American university and is extremely intelligent, and his father is an extremely famous artist known by everyone in Taiwan. He is a true gentleman who has international common sense and discerning manners, and we have been good friends for more than a decade. My friend told me that he had reserved suites in two of Las Vegas’s top hotels, Wynn and Bellagio, and invited me to join him for the countdown and New Year’s parties being held in the hotels. Last year, I had a prior obligation and had to refuse, but this year I was able to fit it in to my schedule, so I joined him. I left on December 30 for a five-day, three-night trip. On New Year’s Eve, I joined in the party at Bellagio. Of course, it was a formal event, with men in tuxedos and ladies in dresses. The party venue was extremely festive as these beautifully adorned men and women came and went. The friend who invited me did not stay just at the Bellagio, but hopped from party to party at a number of hotels. From what I was told, he had not bought the party ticket for me there or for the other parties, but rather we were invited guests of the hotel. It is one of the special favors, or “comps,” that the hotel offers to regular customers such as my friend, who each year spends large sums of money on gambling in the casino and on enjoying luxurious rooms and meals. Another evening, I went with my friend for dinner, and our group of four people enjoyed such delicacies as white truffles, delicious top-quality meat, and expensive wine. At the end of the meal, I happened to glance and see that my friend had left a $1,000 tip on the table. It had been his treat, so I do not know how much the bill was for, but given that tips in the United States are usually around 15 percent of the cost of the food and drink, the total bill must have been around ¥700,000. The casinos themselves are very different these days as well. If you win big at the slot machines, instead of having the chips come jangling down, the casino staff come to you quickly and hand you a check. They are making it less complicated and even more enjoyable than ever. I also went to a show. I took in ONE by Cirque du Soleil, a Michael Jackson–themed show that was playing at the Mandalay Bay Hotel. It was spectacular.

As Gamblers Dwindle, Las Vegas Is Transforming into a Major Entertainment City

In the past, I have thought about going to casinos around the world, and to date I have been to a dozen or so. It was not that I like to gamble or that I wanted to win money, but that I wanted to see the atmosphere inside. I traded in the entrance fee of ¥100,000 for chips and had fun gambling a little. It was difficult to win, but still enjoyable. Basically, I am not much of a gambler. The projects I carry out are like major gambles, so by comparison, the wagers I made at the casinos did not give me that much of a thrill. The first time I visited Las Vegas was in February 1973. At the time, the hotels were concentrated in the downtown area, but since that time, luxury hotels have gradually been built up along Las Vegas Boulevard (known as the “Strip”), stretching toward the airport. A major international conference center has also been built, and numerous conventions are now held there. And there are more and more shows and concerts, including the performances by Cirque de Soleil. With 5,000-room hotels appearing as well, every year there are new facilities to entertain those who visit. The hot topic at the moment is the soon-to-be-completed giant Ferris wheel known as the “High Roller,” which will be 167 meters tall. About 40 people will fit in each of the 28 large passenger cars of the Ferris wheel. That means that more than 1,000 people can enjoy the Las Vegas scenery at one time. Each full rotation of the wheel takes about 30 minutes. It will be amazing to be able to see from one end of the Strip to the other. I love Ferris wheels myself, and when I went to see the London Olympics, I even took a ride on the London Eye, so I am looking forward to the completion of the High Roller. I have made up my mind to spend next New Year’s Eve in Las Vegas as well, although the thought of coming in a bit warmer season is also appealing so that I can relax by the hotel pool with a glass of champagne in one hand. An article in the Yomiuri Shimbun on January 11, titled “Transformation Underway in Casino Town” (international section of the morning edition), introduced statistics from the Las Vegas Tourism Bureau showing that the percentage of people who gambled during their stay in Las Vegas dropped from 85 percent in 2008 to 72 percent in 2012. It noted, “Las Vegas legalized gambling in 1931. From the 1940s, resort hotels with casinos sprung up one after another as they carried out gambling-centered development. But since the 1990s, casinos have been built around the world, and the relative weight has shifted to conventions and high-quality dining, shows, and other entertainment.” Las Vegas is shifting away from being a casino town and is now becoming a major entertainment city where everyone from children to seniors can enjoy themselves.

Japan’s Casinos Are Coming Soon―Find a Location in the Suburbs Rather than Odaiba

In Japan as well, a supra-partisan “Alliance for the Promotion of International Tourism” has drafted a “Bill Concerning the Promotion of Development of Designated Integrated Resort Areas” (known as the IR Promotion Bill or the Casino Bill) and it has been introduced in the Diet by the Liberal Democratic Party, Japan Restoration Party, and the People’s Life Party. According to the article I mentioned above, “Prime Minister Abe serves as the Alliance’s chief advisor and expressed his enthusiasm for the idea, stating, ‘While there are various challenges, I personally think the idea has a good deal of merit.’” The tax reforms include a provision to allow large corporations with capital of more than ¥100 million to treat up to half of their entertainment costs as expenses, and this tax break is expected to help revive top-class clubs and restaurants that have been feeling the pinch in recent years. This corresponds to the third of Prime Minister Abe’s so-called three arrow economic approach, or his growth strategy. Casinos are places that can produce demand while giving the public the sense of affluence, and I believe that they are worth promoting as a strategy to contribute to economic growth, as are the tax cuts. Also, as we look ahead to the Tokyo Olympics, it will also be beneficial as a means of attracting foreign tourists. Japan is aiming to be a tourist destination, and last year the number of visitors from abroad reached 11.25 million, but the government’s target is to draw 30 million people by 2030. Casinos are necessary to reach that target, and if Japan does go ahead with it, then we should follow Las Vegas’s example and place priority on building “healthy” environments that families can visit too, integrating the casinos, which are gambling sites, with convention halls, shows, as well as “dining” that features the elements of hospitality at which the Japanese people excel. When you think about being operational by the Tokyo Olympics, the Casino Act must be passed within this year. However, there are many points that need to be considered. The first is the location. There have been many people calling for Odaiba to be the site, but I believe it is a bit too close to the hustle and bustle of the city. On America’s East Coast, the famous casino town is Atlantic City, and in 1983, I rented a car and drove two hours from New York City to visit it. In the Tokyo metropolitan area, I believe Makuhari is a strong candidate. It is close to central Tokyo, and there is easy access to the Urayasu theme parks as well as Haneda and Narita Airports. Chiba City has put a great deal of effort into making Makuhari a new urban center, and one would expect synergy with the many existing facilities while at the same time having plenty of space for growth. I sincerely hope that this will be added to the discussions.

Lots of Issues to Be Resolved, Including the Potential for Abuse and Relationship to Pachinko

In recent years, when you talk about casinos, most people in the world think of Macau rather than Las Vegas. In the spring of 1973, I took all of my employees on a study trip abroad and visited Macau, but it is much bigger today than it was then. According to the Yomiuri article I noted above, “Macau has a population of about 590,000 and an area of about 300,000 km2. Known as ‘Las Vegas of the East,’ Macau approved foreign-owned casinos in 2002, and since then the country has seen large-scale American and Hong Kong casinos enter the market one after another. In 2006, Macau’s casino revenues surpassed Las Vegas to become Number 1 in the world.” Compared to the annual gaming revenues of $6 billion in Las Vegas, Macau’s revenues were more than six times higher, at $38 billion. Some Las Vegas resorts such as Wynn and the Venetian have also entered the Macau market and both have been successful. However, according to this article, “There are deep-rooted indications that Macau is a site used by Chinese Communist Party and local government officials to launder money that they have obtained illegally.” It continues, “According to a middleman based in Zhuhai, a city in Guangdong Province, located next to Macau, customers leave Chinese Yuan with an intermediary on the China side who then returns it to them on the Macau side after having taken a cut. The customer trades the money in for chips, cashes the chips in, and then deposits the ‘clean money’ into bank accounts in Hong Kong or real estate investments.” Japan would need to establish strict regulations to ensure that its casinos would not be used in this way. Macau’s gaming revenues are $38 billion, or in other words, about ¥3.8 trillion in Japanese yen. But in Japan there is an amusement industry with revenues that far surpass that at ¥24 trillion per year and gross profits of ¥3.7 trillion―the pachinko industry. Many pachinko businesses are operated by South and North Korean residents of Japan, who represent 0.5 percent of the Japanese population, so an enormous amount of pachinko money flows to the Korean Peninsula. If it is going to North Korea, it probably is used to fund nuclear development. There are 35 casinos in Macau and 40 in Las Vegas, but there are more than 10,000 pachinko parlors throughout Japan. Perhaps the reason that we have not been able to have casinos in Japan until now was the resistance from this pachinko industry that has penetrated Japan so broadly. The concessions for the pachinko business are held by the police, who control them under the Amusement Businesses Law. In terms of the other forms of publicly operated gambling, horse racing is overseen by the Ministry of Agriculture, Forestry and Fisheries; boat racing is under the Ministry of Land, Infrastructure, Transport and Tourism; bicycle and car racing are under the Ministry of Economy, Trade and Industry; and the lottery is under the Ministry of Internal Affairs and Communications. In the recently introduced Casino Bill, the plan is to give various powers to a casino regulatory committee that would be created under the Ministry of Internal Affairs and Communications, although there will undoubtedly be haggling among these agencies over the casinos.

Thought Should Be Given to Gambling Addiction Countermeasures, Including Restricting Access to Casinos

If casinos are built, the Yomiuri article noted that there is a fear that there will be an increase in “gambling addicts.” There are more than 100 countries around the world that have lifted their bans on casinos, and most industrialized nations permit it. However, the laws under which they operate vary by country―for example, your winnings in Las Vegas are taxable (although it does not apply to Japanese citizens), but they are not taxed in Macau. The casinos in Monaco have an entry fee, and their own citizens are not allowed to enter. In South Korea’s Walker Hill casinos as well, South Koreans are not allowed to enter. Most countries have some similar restrictions in terms of entry, and age restrictions are always in force. In Europe, you also see the approach of restricting those who enter by creating a type of high society atmosphere. On the other hand, even in Japan, there are many people who are addicted to pachinko and other forms of publicly operated gambling. When building casinos, we need to minimize the negative impact on the public, and in order to create upscale facilities, we must research casinos around the world and decide on the rules, such as whether or not to charge an entry fee, how much should be charged if we do, and what other entry restrictions should be implemented. My favorite hotel in Las Vegas is the Wynn. The CEO of Wynn is a good friend of my friend, but he is always traveling to luxury resorts around the world, and he was out of town this time as well, so I could not meet him. I was, however, able to speak with the company’s COO. He told me that if casinos were to be approved in Japan, they would by all means try to enter the market. Since we are both in the hotel business, we were able to exchange a variety of useful information. If the bill passes and plans become more concrete, I would like to contribute in some way to realizing the development of the casino business in Japan.

Second Lieutenant Onoda, Who Returned Alive from Lubang Island

The other day, I read in the news that Second Lieutenant Hiroo Onoda had passed away, and I remembered a photograph that was taken when he returned home alive from Lubang Island after continuing to fight the war for 29 years. He reminded me of the image of Japanese soldiers from long ago. Under orders from his commanding officer, he finally ceased fighting and handed over his military sword to a Filipino military commander, although it was then returned to Mr. Onoda. The commander said that Onoda was “an exemplar of the loyalty of the military,” and he was relieved of his weapon in a surrender ceremony. Onoda claimed that he had continued to carry on the fight because he did not believe the war was over, and with the help of Japan’s Ministry of Foreign Affairs, he received a pardon from the government of the Philippines. Today, there are three leading candidates in the Tokyo gubernatorial election, Yoichi Masuzoe, Morihiro Hosokawa, and Toshio Tamogami. But when you compare Tamogami―who has visited the Yasukuni Shrine every year for annual festivals and other important days since his time in the Self-Defense Forces―to Masuzoe, who has never once visited Yasukuni and who has said of the Japanese flag, “It’s in the way, so remove it,” or to Hosokawa, who claimed “We should decline the Olympics,” it makes me wonder if these latter two are really Japanese. I would like to introduce a comment that Mr. Onoda made in the June 2005 edition of Shukan Shincho (“Koizumi’s Visit to Yasukuni―This Is What I Think”): For 15 years, I was enshrined at Yasukuni Shrine. If it had stayed that way, I would not have had any reason to know how Japan is today. If the country does not support and protect Yasukuni, it is like not repaying the loan we made to you and instead defaulting on that debt. Building another facility in its place would be an act of betrayal to us. It is something that simply cannot be permitted. Of course homage should be paid at Yasukuni, and it does not matter what anyone says. If they do not like it, then they do not have to visit. Some people object because Class-A war criminals are enshrined there, but that trial was held during the Occupation, and those people lost their lives because of that. The tradition in Japan is that once a person is dead, their sins are no longer held against them. But in China, one remains a sinner even after death, and they even go so far as to expose their graves. Do we really have to accept those Chinese values? Why not just say nothing and quietly go pay your respects one time? Most of the people who died in the war were very young. While their relatives are still in good health, they can warmly pray for them, but once those relatives are gone, there is no place else that they can be worshipped other than Yasukuni. The war is something that the country did, so it is naturally something that the country should take responsibility for.” Second Lieutenant Onoda truly reminds me of the Japanese people of olden times, and I will always remember the time that he attended a wine-tasting party that I hosted. I would like to offer my sincere condolences on Mr. Onoda’s passing. He defended the honor of the Japanese people, and I would like to express my profound respect for his valiant service, the tales of which have been passed down to subsequent generations of Japanese people. May he rest in peace.